The pound slumped against the euro after a report showed the manufacturing industry grew at a slower place than analysts forecast in January.
Sterling depreciated as much as 0.8 percent to 86.35 pence per euro, the weakest level since Nov. 23, 2011, and was at 86.29 pence per euro at 9:42 a.m. London time. It slipped 0.1 percent to $1.5838.
The yield on 10-year gilts rose two basis points to 2.11 percent.
Markit Economics said its gauge of manufacturing orders fell to 50.8 this month from revised 51.2 in December. The median forecast by economists in a Bloomberg survey was for a decline to 51. A reading above 50 indicates expansion.